Muckraking news site, TheIntercept, is currently publishing a series of seven articles detailing allegations of investor fraud and worker exploitation made by former employees in two lawsuits against the Columbus, Georgia-based insurance company. In its first installment on January 11, 2018, The Intercept contends that allegations against one of the world’s most ethical companies might actually “pull together virtually every major corporate scandal of the past two decades into the behavior of a single company.”

The Intercept’s series is based on interviews with former and current employees. As of January 24, 2018, the site has published two articles that describe the allegations made by nine former employees in the two lawsuits. One is a class-action suit alleging worker abuse, and the other, brought by former employees who are shareholders, alleges investor fraud. According to The Intercept, Aflac’s top management and board of directors have known the claims of fraud for more than a year but have not reported anything in public filings with the U.S. Securities and Exchange Commission “beyond generalities about pending lawsuits that they expect will not hurt the company’s bottom line.”

"In the week after The Intercept published its first series installment on January 11, 2018, the company’s stocks fell by 7%."

The following is a rundown of the allegations made by Aflac’s former employees:

Aflac misclassified employees as independent contractors even though it controls many aspects of sales associates’ work, including accounts. Contractors have mandatory training sessions and in-person meetings, and they must follow a sales script in which they call themselves employees. However, sales associates say they are charged for their desks and even the plush ducks they give to clients. Only a small disclaimer at the bottom of Aflac’s informational sheets for recruits stated that agents are contractors and not employees.

The company deceived new recruits about the amount of money they could make in their first year. Recruits were told they could make six-figure incomes, even though very few even come close to that. A draft of the class-action suit claims that the typical sales agent stays for less than a year and earns on average under $10,000 in commissions. The Intercept’s interviewees said it’s impossible to make ends meet on their commission-only incomes. One former sales associate reported that he made less than $25,000 in two years and left the company with his house in foreclosure.

Employees were encouraged to sell policies to friends and family, and to recruit them in what could be considered a multilevel marketing scheme. Sales associates earned 5% of all first-year sales produced by the recruits they bring in, and managers pressured associates to recruit.

In an alleged scheme reminiscent of the Wells Fargo scandal, Aflac sales associates were pressured to meet goals by selling policies without customer consent, illegally bundling policies and issuing policies to ineligible customers.

Aflac manipulated key operations metrics to show company growth and manipulated their earnings statements to meet goals. The employee-shareholder lawsuit claims that Aflac’s “average weekly producers” metric, or AWP—which tracks the sales force’s weekly progress—was gamed. Regional and district managers reportedly spread credit for new sales around to sales associates to increase their AWP, which in turn helped them meet quotas and increased their compensation. Aflac used this metric in investor presentations and financial reporting to show overall growth. The suit also alleges that Aflac would leave open quarterly earnings beyond the calendar date so that it could add sales in that period.

The company retaliated against whistleblower Martin Conroy. Conroy, a former district sales coordinator, told management in 2015 that Aflac’s representatives were allegedly issuing policies to New York City employees who were not qualified for such policies. Conroy claims that he was stripped of his team and accounts, and was eventually forced to quit after he alerted managers.

Some Changes Were MadeIn December 2016, the former employees presented their allegations to Aflac management. Aflac reportedly denied the charges, but did make a few changes to their recruiting materials, compensation plan and operation metrics. For example, in the company’s new recruiting materials they decreased the amount of money they promise sales associates could earn in their first year. They also removed a recruiting video in which the announcer declares, “There’s a lot of money to be made at Aflac.”

Aflac’s ResponseIn the week after The Intercept published its first series installment on January 11, 2018, the company’s stocks fell by 7%. Aflac has forcefully denied the former employees’ allegations against it and has also conducted its own board investigation into the accusations the plaintiffs allege in the lawsuits. Aflac released the results of the investigation in January 2018, finding that evidence of AWP manipulation lacked merit as well as minimizing the importance of the metric. Aflac also released this statement: “Recent media stories regarding Aflac contain false allegations made by a very small group of independent contractors. Aflac intends to aggressively fight these allegations beginning with filing for their dismissal.”

Whether Aflac’s denial of the allegations will succeed in court, The Intercept still has five installments left in its series to cover the former employees’ lawsuits. The third article should be coming out later this month.